There are two ways the the One Big Beautiful Bill Act (OBBBA) can affect your equity compensation.

Does your job offer you stock compensation?

Restricted stock units (RSUs) are one of the most common types of equity compensation we see as tax professionals.

RSUs are thought of as a “full value” grant—you receive complete ownership and full value once the vesting period is completed. You don’t have to pay anything like you would with stock options.

So where do the taxes come in? The market value of the RSUs on the vesting date is the amount of taxable compensation to you. The total taxable amount is the market value (stock price) multiplied by the number of shares vested.

Incentive stock options (ISOs) can qualify for special tax benefits under the tax code (if certain requirements are met):

- The employer can structure compensation to an employee that is not subject to Social Security or Medicare taxes
- The employee gets favorable long-term capital gains tax rates when they sell their exercised ISO stock

In order to receive those full benefits, an employee would need to hold the acquired stock for at least two years from when the stock options were granted, and one year from date the stock options were exercised.